diff --git a/build.sbt b/build.sbt
index 208550fbb..b190eca38 100644
--- a/build.sbt
+++ b/build.sbt
@@ -76,7 +76,7 @@ ThisBuild / mergifyPrRules ++= Seq(
 )
 
 val CatsVersion = "2.11.0"
-val CatsEffectVersion = "3.6-28f8f29"
+val CatsEffectVersion = "3.6-d5f779e-20241219T080448Z-SNAPSHOT"
 val CatsMtlVersion = "1.4.0"
 val FS2Version = "3.11.0"
 val MUnitVersion = "1.0.0"
@@ -714,7 +714,7 @@ lazy val `oteljava-context-storage` = project
     ),
     Test / javaOptions ++= Seq(
       "-Dotel.java.global-autoconfigure.enabled=true",
-      "-Dcats.effect.ioLocalPropagation=true",
+      "-Dcats.effect.trackFiberContext=true",
     ),
     Test / fork := true,
   )
@@ -868,7 +868,7 @@ lazy val examples = project
     javaAgents += "io.opentelemetry.javaagent" % "opentelemetry-javaagent" % OpenTelemetryInstrumentationVersion % Runtime,
     run / fork := true,
     javaOptions += "-Dotel.java.global-autoconfigure.enabled=true",
-    javaOptions += "-Dcats.effect.ioLocalPropagation=true",
+    javaOptions += "-Dcats.effect.trackFiberContext=true",
     envVars ++= Map(
       "OTEL_PROPAGATORS" -> "b3multi",
       "OTEL_SERVICE_NAME" -> "Trace Example"
diff --git a/oteljava/context-storage/src/main/scala/org/typelevel/otel4s/oteljava/IOLocalContextStorage.scala b/oteljava/context-storage/src/main/scala/org/typelevel/otel4s/oteljava/IOLocalContextStorage.scala
index 493dc26ad..f44af666a 100644
--- a/oteljava/context-storage/src/main/scala/org/typelevel/otel4s/oteljava/IOLocalContextStorage.scala
+++ b/oteljava/context-storage/src/main/scala/org/typelevel/otel4s/oteljava/IOLocalContextStorage.scala
@@ -19,6 +19,7 @@ package org.typelevel.otel4s.oteljava
 import cats.effect.IOLocal
 import cats.effect.LiftIO
 import cats.effect.MonadCancelThrow
+import cats.effect.unsafe.IORuntime
 import cats.mtl.Local
 import io.opentelemetry.context.{Context => JContext}
 import io.opentelemetry.context.ContextStorage
@@ -35,7 +36,20 @@ import org.typelevel.otel4s.oteljava.context.LocalContext
   */
 class IOLocalContextStorage(_ioLocal: () => IOLocal[Context]) extends ContextStorage {
   private[this] implicit lazy val ioLocal: IOLocal[Context] = _ioLocal()
-  private[this] lazy val unsafeThreadLocal = ioLocal.unsafeThreadLocal()
+  private[this] lazy val unsafeThreadLocal: ThreadLocal[Context] = {
+    val fiberLocal = ioLocal.unsafeThreadLocal()
+
+    new ThreadLocal[Context] {
+      override def initialValue(): Context =
+        Context.root
+
+      override def get(): Context =
+        if (IORuntime.isUnderFiberContext()) fiberLocal.get() else super.get()
+
+      override def set(value: Context): Unit =
+        if (IORuntime.isUnderFiberContext()) fiberLocal.set(value) else super.set(value)
+    }
+  }
 
   @inline private[this] def unsafeCurrent: Context =
     unsafeThreadLocal.get()
@@ -82,7 +96,7 @@ object IOLocalContextStorage {
             } else {
               F.raiseError(
                 new IllegalStateException(
-                  "IOLocal propagation must be enabled with: -Dcats.effect.ioLocalPropagation=true"
+                  "IOLocal propagation must be enabled with: -Dcats.effect.trackFiberContext=true"
                 )
               )
             }
diff --git a/oteljava/context-storage/src/test/scala/org/typelevel/otel4s/oteljava/IOLocalContextStorageSuite.scala b/oteljava/context-storage/src/test/scala/org/typelevel/otel4s/oteljava/IOLocalContextStorageSuite.scala
index 550d6b1fb..a6f6a913f 100644
--- a/oteljava/context-storage/src/test/scala/org/typelevel/otel4s/oteljava/IOLocalContextStorageSuite.scala
+++ b/oteljava/context-storage/src/test/scala/org/typelevel/otel4s/oteljava/IOLocalContextStorageSuite.scala
@@ -78,8 +78,7 @@ class IOLocalContextStorageSuite extends CatsEffectSuite {
     }
   }
 
-  // see https://discord.com/channels/632277896739946517/839263556754472990/1317163027451088926
-  test("works as a Java-only ContextStorage".ignore) {
+  test("works as a Java-only ContextStorage") {
     usingModifiedCtx(_.`with`(key1, "1")) {
       assertEquals(Option(jCurrent.get(key1)), Some("1"))
       assertEquals(Option(jCurrent.get(key2)), None)